Munzam zarar (additional damages) literally means "additional loss". In law, it has a specific meaning: under TCO Art. 122, it is the creditor's damage exceeding default interest.
What are additional damages?
When a debtor does not pay its debt on time (falls into default), it must, as a rule, pay default interest to the creditor. However, default interest does not always fully cover the real damage the creditor sustains. Particularly in periods of high inflation, serious differences arise between statutory default interest and the damage the creditor actually suffers.
This difference is what is called additional damages. The creditor may separately claim this damage exceeding default interest.
Example
The creditor's claim of 100.000 TL, which arose in 2014, could only be collected in 2024, after a long 10-year court proceeding during which inflation ran high. Total default interest calculated over 10 years at an average annual statutory interest rate of %15 came to 150.000 TL, and a total of 250.000 TL, including the principal, was paid to the creditor.
However, had the creditor received the money on time in 2014, it would have been able to buy 1.000 units of raw material worth 100.000 TL for its commercial business. At the end of the 10 years, due to monetary erosion and high inflation, the cost of the same 1.000 units of raw material rose to 1.200.000 TL; with the 250.000 TL the creditor received, only 208 units of the same raw material could be bought. The creditor's real loss of purchasing power is 950.000 TL.
Since the 250.000 TL paid to the creditor already includes the statutory default interest (150.000 TL), this 950.000 TL (1.200.000 TL - 250.000 TL) not covered by interest is additional damages (excess damage). Under TCO Art. 122, the creditor may claim compensation for this concrete inflationary damage not covered by interest over the 10-year period.
Legal basis
The main legal basis of additional damages is Article 122 of Turkish Code of Obligations No. 6098:
"If the creditor has suffered damage exceeding default interest, the debtor is also liable to compensate this damage unless it proves that it was not at fault."
In addition, Article 1530 of Turkish Commercial Code No. 6102 provides that additional damages may be claimed as well as late payment interest in commercial transactions.
The three elements of additional damages
According to Court of Cassation case law, three elements must occur together for additional damages to arise:
| # | Element | Description |
|---|---|---|
| 1 | The debtor's default | The debtor must have missed the payment deadline set by notice or contract (TCO Art. 117 et seq.). |
| 2 | Damage exceeding default interest | The creditor must have suffered actual damage exceeding default interest during the period of default. |
| 3 | The debtor's fault (presumption) | The debtor is liable for additional damages unless it proves that it was not at fault. The burden of proof lies with the debtor. |
Presumption of Faultlessness
TCO Art. 122 provides for a presumption of faultlessness: the debtor is liable for additional damages unless it proves that it was not at fault. In other words, the burden of proof is reversed — the creditor does not have to prove fault.
Difference from default interest
Additional damages and default interest are often confused. The differences:
| Criterion | Default Interest | Additional Damages |
|---|---|---|
| Nature | Statutory minimum damage | Additional damage exceeding default interest |
| Claim | Accrues automatically | Must be claimed separately |
| Proof | No proof required | Creditor must prove the damage |
| Fault | Fault not required | Presumption of faultlessness (proof on the debtor) |
| Amount | At the statutory rate | To the extent of actual damage |
Areas of application
Additional damages are most often claimed in the following areas:
Banking
Customers may claim additional damages in situations such as banks underpaying or paying late deposit interest or delaying credit card refund claims. The Court of Cassation has ruled that in such actions banks must prove their lack of fault.
Commercial relationships
Under TTK Art. 1530, where an invoice amount is delayed in commercial transactions, the creditor may claim its damage exceeding default interest (loss of alternative investment, loan interest difference).
Labor law
For late-paid severance pay, notice pay or labor claims, the employee may claim inflation-driven additional damages.
Expropriation
Where the expropriation price is paid late, the owner may claim additional damages for the inflation and alternative return difference in that period.
Lease relationships
Where the tenant does not pay the rent, the landlord's damage exceeding default interest (loan interest, alternative return difference) may be claimed as additional damages.
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Go to the calculation pageFrequently asked questions about additional damages
What are additional damages?
Additional damages are, under TCO Art. 122, the creditor's damage exceeding default interest. Default interest is regarded as the creditor's minimum damage; damage exceeding this interest may be claimed as additional damages.
What are the elements of additional damages?
Additional damages have three elements: (1) The debtor falling into default, (2) The creditor suffering damage exceeding default interest, (3) The debtor being unable to prove its lack of fault.
How do additional damages differ from default interest?
Default interest is the statutory interest that accrues automatically when the debtor falls into default. Additional damages, by contrast, are the additional damage actually suffered by the creditor that exceeds default interest, and must be claimed separately.
Is fault required for additional damages?
TCO Art. 122 provides for a presumption of faultlessness. That is, the debtor is liable for additional damages unless it proves that it was not at fault. The burden of proof lies with the debtor.
What is the statute of limitations period for additional damages?
Additional damages are subject to the statute of limitations period that applies to the principal claim. Generally, a 10-year statute of limitations period applies (TCO Art. 146). This period may differ in commercial transactions.